How to Trade the Euro's Rebound

The euro recovered nicely after the shock of the weekend elections, but this strategist thinks it may be temporary.

How about that euro, huh? After falling to a four-month low against the dollar right after the results of France's election were announced, the single currency has managed to make its way right back into its longtime trading range.

Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, says there were a couple of factors at work. First, investors had big short positions in the euro, so when it dipped below 1.30 against the dollar, "that's a good area for people to take profits, so that's exactly what they did," she told CNBC's Melissa Lee. Also, London markets were closed for a holiday, so there was no follow-through to the initial selloff.

Money In Motion: Trading the Euro's Rebound

A currency play on the euro and Japanese yen, with Amelia Bourdeau, Westpac Institutional Bank.

But those aren't really reasons to love the euro, and Bourdeau thinks it's vulnerable - just not necessarily against the dollar.

"I'd like to try to short euro against the yen because shorting it against the dollar has been a very frustrating trade," she says.

Bourdeau wants to sell the euro against the yen at 104.40, looking for a move to 101.85 and setting a stop just above the 200-day moving average at 105.65.

You can watch the discussion on the video.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.